Zac is a C2H2 zinc finger protein, which regulates apoptosis and cell cycle arrest through DNA binding and transactivation. During tumorigenesis and in response to mitogenic activation, Zac gene expression is down-regulated in a methylation-sensitive manner. As yet, no target genes have been identified that could explain the potent antiproliferative function of Zac. Here, applying genome-wide expression analysis, we identify peroxisome proliferator-activated receptor gamma (PPARgamma) as a new bona fide Zac target gene, which is induced by direct Zac binding to the proximal PPARgamma1 promoter. We show that in human colon carcinoma cells, ZAC activates expression of PPARgamma target genes in a PPARgamma-dependent manner. Moreover, we show that treatment of pituitary tumor cells with octreotide, a somatostatin analogue, leads to Zac induction and subsequent Zac-dependent up-regulation of PPARgamma, which thereupon mediates part of the antiproliferative activity of Zac. Our work provides a first step toward elucidating a functional relationship between Zac and PPARgamma that could be relevant to the understanding of tumorigenesis and diabetes as well.